Every Business, that relies on the physical property for its business to run is closure to disasters like fire, theft, and wind damage. When a business is undergone into any disaster, the Business Income Insurance comes into the picture and pays for expenses based on the previous records of the business, until it comes back to its ground. With Business Income Insurance, the company can pay expenses, such as payrolls and bills when the business property is being repaired or replaced when any damage from fire, theft, or wind takes place. Business Income Insurance is a type of property insurance policy, which covers a company’s loss of income due to slowdown or temporary suspension of normal operations, which stem from damage to its physical property.
If the business is not able to operate and generate revenue due to covered property damage, then Business Income Insurance may help cover the costs until the business is up and running again.
- Business Income insurance acts as Business Interruption Coverage or Income Protection Insurance.
- Business Income Insurance is a type of insurance that helps, the business replace the lost income resulting from fire, theft, and wind damage.
- Business relying on a physical location, equipment, and other property to generate income need to add endorsements to increase their business income insurance coverage.
- Business Income Insurance can be added to Business Owners Policy, where additional insurance options can be included for overall coverage of business-like
- Business Income Extension for Essential Personnel
- Business Income Extension for Cloud Service Interruption
- Business Income Extension for Off-Premises Operations
- Business Income Extension for Premises Utility Services
- Business Income Extension for Dependent Properties
- Business Income Extension for Electronic Vandalism
- Extended Business Income.
What does it cover?
Business Income Insurance covers the following aspects
- If the company can’t run the business because of covered property damage like fire, this coverage helps replace some of the lost income.
- Business Income Insurance covers common costs and expenses like mortgage and rents payment, employees’ wages and payrolls, loss of net income or profit for the period of restoration, loan, and tax payments.
- Business Income Insurance includes loss of net trading profit, standing charges, loss in respect of wages.
- Additional coverage includes suppliers premises, customer premises, failure oof public utility of power/gas/water supply
What it doesn’t cover?
Business Income Insurance doesn’t cover everything, the insurance won’t help the business with
- The business won’t receive coverage, when unable to run the business because of an accident or illness.
- Business Income Insurance won’t cover, acts of water, government seizure, and nuclear hazards.
- Business Income Insurance coverage won’t include, when
- Extreme weather events, such as earthquakes, flood, and mudslides
- Certain operating expenses such as marketing, funds are allocated for research and development.
- Pandemics, such as the coronavirus, diseases.
Pros of Business Income Insurance
- Business Income Insurance pays for lost revenue during the restoration period, which has a time limit, but can be extended for an additional cost.
Cons of Business Income Insurance
- Business Income Insurance won’t cover the income that is not documented.
- Flood, Earthquake, or glass breakage are typically not covered in Business Income Policy.
Any business that has a physical property, retailers stores, services business, software companies, including offices, computers, servers, and cloud storage need to have Business Income Insurance.